Bank of America Merrill Lynch Financials Conference 2019

Home , Bank of America, Merrill (company)

Sergio P. Ermotti Group Chief Executive Officer

September 24, 2019 Important information

Forward Looking Statements: This presentation contains statements that constitute “forward-looking statements”, including but not limited to performance targets, expectations and ambitions, as well as management’s outlook for UBS’s financial performance and statements relating to the anticipated effect of transactions and strategic or business initiatives on UBS’s business and future development. While these forward-looking statements represent UBS’s judgments and expectations concerning the matters described, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially. For a discussion of the risks and uncertainties that may affect UBS's future results please refer to the "Risk Factors" and other sections of UBS’s most recent Annual Report on Form 20-F, quarterly reports and other information furnished to or filed with the US Securities and Exchange Commission on Form 6-K, and the cautionary statement on the last page of this presentation. UBS is not under any obligation to (and expressly disclaims any obligation to) update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise.

Non-GAAP Financial Measures: In addition to reporting results in accordance with International Financial Reporting Standards (IFRS), UBS reports adjusted results that exclude items that management believes are not representative of the underlying performance of its businesses. Such adjusted results are non-GAAP financial measures as defined by US Securities and Exchange Commission (SEC) regulations and may be Alternative Performance Measures as defined under the guidelines published the European Securities Market Authority (ESMA). Please refer to pages 7-10 of UBS's Quarterly Report for the second quarter of 2019 and to its most recent Annual Report for a reconciliation of adjusted performance measures to reported results under IFRS and for definitions of adjusted performance measures and other alternative performance measures.

Disclaimer: This presentation and the information contained herein are provided solely for information purposes, and are not to be construed as a solicitation of an offer to buy or sell any securities or other financial instruments in Switzerland, the United States or any other jurisdiction. No investment decision relating to securities of or relating to UBS Group AG, UBS AG or their affiliates should be made on the basis of this document. No representation or warranty is made or implied concerning, and UBS assumes no responsibility for, the accuracy, completeness, reliability or comparability of the information contained herein relating to third parties, which is based solely on publicly available information. UBS undertakes no obligation to update the information contained herein.

Available Information: UBS's Annual Report, Quarterly Reports, SEC filings on Form 20-F and Form 6-K, as well as investor presentations and other financial information are available at www.ubs.com/investors. UBS’s Annual Report on Form 20-F, quarterly reports and other information furnished to or filed with the US Securities and Exchange Commission on Form 6-K are also available at the SEC's website: www.sec.gov

Basel III RWA, LRD and capital: Basel III numbers are based on the BIS Basel III framework, as applicable for Swiss Systemically relevant banks (SRB). Numbers in the presentation are based on the revised Swiss SRB rules as of 1.1.20 that became effective on 1.7.16, unless otherwise stated. Basel III risk-weighted assets in this presentation are calculated on the basis of Swiss SRB rules as of 1.1.20 unless otherwise stated. Our RWA under BIS Basel III are the same as under Swiss SRB Basel III. Leverage ratio and leverage ratio denominator in this presentation are calculated on the basis of Swiss SRB rules as of 1.1.20, unless otherwise stated. Refer to the “Capital management” section in the 2Q19 report for more information.

Currency translation of monthly income statement items of operations with a functional currency other than the US dollar are translated with month-end rates into US dollar.

Definitions: "Earnings per share" refers to diluted earnings per share. "Litigation" refers to net additions/releases to provisions for litigation regulatory and similar matters reflected in the income statement for the relevant period. "Net profit" refers to net profit attributable to shareholders.

Rounding: Numbers presented throughout this presentation may not add up precisely to the totals provided in the tables and text. Percentages, percent changes, and adjusted results are calculated on the basis of unrounded figures. Information on absolute changes between reporting periods, which is provided in text that can be derived from figures displayed in the tables, is calculated on a rounded basis.

Tables: Within tables, blank fields generally indicate that the field is not applicable or not meaningful, or that information is not available as of the relevant date or for the relevant period. Zero values generally indicate that the respective figure is zero on an actual or rounded basis. Percentage changes are presented as a mathematical calculation of the change between periods.

1 UBS at a glance

› Clients are at the center of everything we do Outstanding › Unique position as the only truly global wealth manager › Leading universal bank in Switzerland with focused client franchises Investment Bank and Asset Management franchises › Strong brand and global reach

› Positioning businesses for growth Leading to Managing for › Investing while remaining disciplined on costs strong financial › Optimizing for evolving operating environment growth and efficiency performance › Developing leading digital capabilities to improve efficiency and client experience

› Disciplined resource usage; focus on sustainable growth Balance sheet strength › Prudent deployment of risk with a focus on stress resilience for all seasons › Return excess capital to shareholders

2 Delivering high quality revenue growth and returns

Underpinned by disciplined resource management and risk control

Operating income 14.4 14.7 +0.8% CAGR

Transaction- driven 6.1 6.1 ~40% revenues1

+1.4% CAGR

Recurring 8.3 8.7 ~60% revenues2

1H16 1H19

Reported 11.7% 14.6% RoCET1

CET1 capital 31.0 34.9

Numbers in USDbn and adjusted unless otherwise indicated. 1 Transaction-based income, other income and CLE in GWM and P&C, performance fees in AM, all IB operating income and all Corporate Center operating income; 2 Recurring net fee income and NII in GWM and P&C, and management fees in AM 3 Clients entrusting us with their assets have supported our growth

Record GWM invested assets of 2.5trn; 90bn in net inflows since 2016; invested asset CAGR of 8%

Americas APAC, EMEA, and Switzerland

Invested asset growth in line with US peers Net new money CAGR of 4.6% Total invested asset growth of 21.1% US peer average2 growth: 17.5%

16.8% 114

(21) 1,321 73 (9) 29

147 1,131 31

31.12.16 Market Dividend NNM Other 30.6.19 FY17 FY18 1H19 Total growth and FX and from NNM interest1 Implementation of US operating model change completed

Numbers in USDbn unless otherwise indicated; excludes minor function with 3bn of invested assets as of 30.6.19 and 3bn of net new money outflows over the period shown. 1 Relates to former WMA only, for the remainder of the Americas region, dividend and interest income is included in the "Market and FX" category; 2 Bank of America, Morgan Stanley and Wells Fargo. Excluding loans and leases 4 Strong growth prospects in APAC

#1 wealth manager and leading IB franchise

1H19 Strong invested assets growth Well positioned to capture future growth PBT1 GWM APAC invested assets Leading foreign wealth, asset GWM 10% CAGR management and IB franchises in China >400bn GWM APAC invested assets, Extending our lead with >70% above the #22 411 entrepreneurs through collaboration 270 Named best IB in China, Hong Launched strategic partnership Kong and Singapore3 with SuMi Trust 31.12.14 30.6.19

#1 Foreign Asset Manager in China4

Numbers in USDbn and adjusted unless otherwise indicated. 1 Excluding Corporate Center; 2 Asian Private Banker 2018 league table; 3 Global Finance, February 2019; 4 Z-Ben Advisors, April 2019 5 Making progress on our strategic initiatives

Management actions to capitalize on structural growth opportunities

Selected strategic levers Spotlight on Global Family Office Group (GFO) Institutional coverage for most sophisticated clients yields significant revenue uptick › Strengthen GFO & UHNW, esp. in Americas

GWM › Increase mandate penetration Clients ~15% revenue CAGR1 › Drive lending and deposit growth › Most sophisticated, institutional-like GWM clients following GFO onboarding › High trading activity, seeking a strategic dialogue › Sustain strong business growth › Requiring coverage across countries and booking centers P&C › Enhance digital lead Set-up › Increase market share with entrepreneurs › A global joint venture between GWM and IB › Dedicated institutional specialists coverage › Capture wholesale opportunity › Rolled out in 8 hubs across EMEA, APAC and the US Year 0 Year 3 AM › Grow indexed, sustainable and impact investing (prior to GFO (3rd year of › Extend presence in key APAC growth markets onboarding) GFO coverage) Offering › Full suite of UBS offering across GWM, IB and AM › Strengthen Advisory and Execution ~20% overall GFO revenue › Bespoke investment and financing solutions IB › Build a digital Investment Bank growth per annum since › Corporate solutions (i.e., M&A, equity/debt capital markets) 2014, including new clients › Enhance and leverage leading research platform

Sustaining disciplined investment in growth, self-funded with structural cost reductions

Numbers in USDbn and adjusted unless otherwise indicated. 1 Average UBS revenues from clients introduced to GFO coverage since 2014 6 Leveraging scale and technology to deliver for clients

Superior client experience to enhance and differentiate our business

Global Wealth Management Personal & Corporate Banking

Euromoney Private Banking and Wealth Management Leveraging innovation into GWM Survey State of the art mortgage distribution #1 Private Banking Services overall platform (UBS Atrium) #1 Technology Strong growth in Digital Corporate Bank

Continuous investment in innovation paying off Leader in Swiss digital banking

Technology to drive operating leverage Transforming to a digital investment bank

A leading ETF provider Market leader in alternative in Europe #1 European Successful in the data (Evidence Lab) ESG ETFs most electronified contributing to #1 1 #2 European markets: FX and positions in Extel 2 indexed player Fully comprehensive cash equities and II surveys platform offering Asset Management Investment Bank

1 Overall research – global; 2 Equity research – global 7 Balancing revenue, cost and capital efficiency

Business mix and geographic footprint drive comparatively high capital efficiency and structurally higher cost/income ratio

UBS Peers1,2 European peer average1 US peer average2

30%

40%

50%

60%

70% Cost Cost efficiency

Cost/income, 1H19 80% Efficiency 90% Indifference curves

100% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% Revenues/RWA, 1H19 Capital efficiency

Data excludes one-offs (including litigation); not adjusted for restructuring costs. 1 Bank of America, Citi, Goldman Sachs, JPMorgan, Morgan Stanley; 2 Barclays, BNP, Credit Suisse, Deutsche Bank, HSBC, Julius Baer and Standard Chartered 8 Delivering returns in line with global peers

Return on CET1 capital US peers1 1H19 annualized European peers2 UBS 19.6% CET1 capital as a percentage of 16.5% tangible equity 14.6% 13.8% 13.6% 13.6% 11.8% 10.3% 9.9% 9.3%

6.8%

JPM BoA UBS MS HSBC Citi GS BNP Barclays CS SC as of 30.6.19 CET1 capital 189 171 355 64 127 141 76 80 43 36 37

Tangible equity3 190 177 47 64 167 153 76 82 47 39 40

RoTE4 19.6% 16.1% 10.8% 13.8% 11.2% 11.9% 11.7% 9.9% 9.4% 8.7% 6.5%

Figures in USDbn for UBS and in local currency for peers. Data based on peer reporting. 1 Bank of America, Citi, Goldman Sachs, JPMorgan, Morgan Stanley; 2 Barclays, BNP, Credit Suisse, HSBC, Standard Chartered; (Deutsche Bank not shown due to negative returns in 1H19); 3 Tangible equity attributable to shareholders; 4 1H19 annualized return on tangible equity attributable to shareholders; 5 The comparatively large difference between UBS's tangible equity and CET1 capital as of 30.6.19 mainly reflects the fact that UBS's tangible equity includes tax loss deferred tax assets (6.2bn) that are 9 not included in CET1 capital; other deduction items include compensation-related components (1.8bn), unrealized gains from cash flow hedges (1.3bn) and dividend accruals. Growing book value while distributing capital

TBVPS growth with dividends well ahead of European peers and close to US peers

6% CAGR TBVPS + dividends CAGR +9% Average, 2011-2Q19 YoY Cumulative 4.17 7% cash dividends 3.48 per share 6%

Tangible book 12.72 11.03 12.00 value per share 2% (TBVPS)

31.12.11 30.6.18 30.6.19 US peer European peer average1 average2

Numbers in USD for UBS and in local currency for peers. 1 Bank of America, Citi, Goldman Sachs, JPMorgan, Morgan Stanley; 2 Barclays, BNP, Credit Suisse, Deutsche Bank, HSBC, Julius Baer and Standard Chartered. 10 Market context

2019 IMF real GDP growth forecast Equity markets MSCI World

3.9%

3.7% Continued strength in equity markets 3.5% › 3.3% 3.2% despite macro and geopolitical tensions

Jul-118 Oct-218 Jan-319 Apr4-19 Jul-519 Sep-618 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19

Geopolitical uncertainty Average daily volumes › Significant drop in USD interest rates; Global economic policy uncertainty index1 EUR and CHF rates also down (3%) (20%) (15%)

› Low volatility across asset classes

2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 US Asian European exchanges2,3 exchanges2,4 exchanges2,5

Yield curves Realized volatility Investment banking fee pools2,6 USD S&P 500 1-month realized volatility M&A, ECM and DCM including LCM 30.6.18 2.88%

(155bps)

1.33% (9%) (9%) (25%) 5.9.19 Americas APAC EMEA 3m 1y 2y 3y 4y 5y 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19

YoY comparisons are end-August YTD. 1 Higher index levels reflect higher levels of geopolitical uncertainty. Source: www.policyuncertainty.com. Monthly; 2 YTD to August (except for Hong Kong

exchange securities, which is YTD to July); 3 NYSE, Nasdaq and CBOE US Equities; 4 Hong Kong exchange securities, Singapore exchange securities, Tokyo stock exchange equity and Shenzhen and 11 Shanghai/Hong Kong Stock Connect; 5 Bolsas y Mercados Espanoles, Deutsche Börse, Euronext, Flow Traders and London Stock Exchange cash equities; 6 Dealogic Focused on improving financial returns

Improving efficiency and delivering higher returns on increasing CET1 capital

85.2% Medium-term returns Reported cost/income

Adjusted cost/income 77.4% 80.8% Upside potential 77.0% › Constructive sentiment 14.6% › Constructive markets Reported RoCET1 10.9% › Rising interest rates › Benign credit environment lasts

CET1 capital 30.2 33.5 34.1 34.9 end of period Downside risks 4.5 › Weak markets 3.9 › Lower interest rates 3.3 1.6 Adverse credit environments 1.5 › Idiosyncratic events 2H 1.5 › Net profit bn 2.9 2.4 2.5 1H 1.8

FY16 FY171 FY18 1H19

Numbers in USD unless otherwise indicated. 1 2H17 adjusted for (2,939m) net impact from US corporate tax rate reduction due to the enactment of the Tax Cuts and Jobs Act (TCJA) 12 Key messages

› Outstanding global client franchises underpinned by strong balance sheet, people and culture › Positioning businesses for growth, with a portfolio of strategic initiatives › Digital is central to delivering innovation for clients and efficiency for our businesses' success › Committed to taking sustainable considerations into account and finding innovative solutions for clients › Focus on improvements in efficiency to redeploy towards growth initiatives and respond to evolving operating environment › Capital strength enables us to invest for growth and withstand tougher environments › Attractive capital return profile through sustainable dividend and growing buybacks

Executing with discipline to deliver sustainable growth and medium-term shareholder value

13 Cautionary statement regarding forward-looking statements

This presentation contains statements that constitute “forward-looking statements,” including but not limited to management’s outlook for UBS’s financial performance and statements relating to the anticipated effect of transactions and strategic initiatives on UBS’s business and future development. While these forward-looking statements represent UBS’s judgments and expectations concerning the matters described, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from UBS’s expectations. These factors include, but are not limited to: (i) the degree to which UBS is successful in the ongoing execution of its strategic plans, including its cost reduction and efficiency initiatives and its ability to manage its levels of risk-weighted assets (RWA) and leverage ratio denominator (LRD), including to counteract regulatory-driven increases, liquidity coverage ratio and other financial resources, and the degree to which UBS is successful in implementing changes to its businesses to meet changing market, regulatory and other conditions; (ii) the continuing low or negative interest rate environment in Switzerland and other jurisdictions, developments in the macroeconomic climate and in the markets in which UBS operates or to which it is exposed, including movements in securities prices or liquidity, credit spreads, and currency exchange rates, and the effects of economic conditions, market developments, and geopolitical tensions on the financial position or creditworthiness of UBS’s clients and counterparties as well as on client sentiment and levels of activity; (iii) changes in the availability of capital and funding, including any changes in UBS’s credit spreads and ratings, as well as availability and cost of funding to meet requirements for debt eligible for total loss-absorbing capacity (TLAC); (iv) changes in or the implementation of financial legislation and regulation in Switzerland, the US, the UK, the European Union and other financial centers that have imposed, or resulted in, or may do so in the future, more stringent or entity-specific capital, TLAC, leverage ratio, liquidity and funding requirements, incremental tax requirements, additional levies, limitations on permitted activities, constraints on remuneration, constraints on transfers of capital and liquidity and sharing of operational costs across the Group or other measures, and the effect these will or would have on UBS’s business activities; (v) the degree to which UBS is successful in implementing further changes to its legal structure to improve its resolvability and meet related regulatory requirements and the potential need to make further changes to the legal structure or booking model of UBS Group in response to legal and regulatory requirements, proposals in Switzerland and other jurisdictions for mandatory structural reform of banks or systemically important institutions or to other external developments, and the extent to which such changes will have the intended effects; (vi) UBS’s ability to maintain and improve its systems and controls for the detection and prevention of money laundering and compliance with sanctions to meet evolving regulatory requirements and expectations, in particular in the US; (vii) the uncertainty arising from the timing and nature of the UK exit from the EU; (viii) changes in UBS’s competitive position, including whether differences in regulatory capital and other requirements among the major financial centers will adversely affect UBS’s ability to compete in certain lines of business; (ix) changes in the standards of conduct applicable to our businesses that may result from new regulation or new enforcement of existing standards, including recently enacted and proposed measures to impose new and enhanced duties when interacting with customers and in the execution and handling of customer transactions; (x) the liability to which UBS may be exposed, or possible constraints or sanctions that regulatory authorities might impose on UBS, due to litigation, contractual claims and regulatory investigations, including the potential for disqualification from certain businesses, potentially large fines or monetary penalties, or the loss of licenses or privileges as a result of regulatory or other governmental sanctions, as well as the effect that litigation, regulatory and similar matters have on the operational risk component of our RWA as well as the amount of capital available for return to shareholders; (xi) the effects on UBS’s cross-border banking business of tax or regulatory developments and of possible changes in UBS’s policies and practices relating to this business; (xii) UBS’s ability to retain and attract the employees necessary to generate revenues and to manage, support and control its businesses, which may be affected by competitive factors; (xiii) changes in accounting or tax standards or policies, and determinations or interpretations affecting the recognition of gain or loss, the valuation of goodwill, the recognition of deferred tax assets and other matters; (xiv) UBS’s ability to implement new technologies and business methods, including digital services and technologies and ability to successfully compete with both existing and new financial service providers, some of which may not be regulated to the same extent; (xv) limitations on the effectiveness of UBS’s internal processes for risk management, risk control, measurement and modeling, and of financial models generally; (xvi) the occurrence of operational failures, such as fraud, misconduct, unauthorized trading, financial crime, cyberattacks, and systems failures; (xvii) restrictions on the ability of UBS Group AG to make payments or distributions, including due to restrictions on the ability of its subsidiaries to make loans or distributions, directly or indirectly, or, in the case of financial difficulties, due to the exercise by FINMA or the regulators of UBS’s operations in other countries of their broad statutory powers in relation to protective measures, restructuring and liquidation proceedings; (xviii) the degree to which changes in regulation, capital or legal structure, financial results or other factors may affect UBS’s ability to maintain its stated capital return objective; and (xix) the effect that these or other factors or unanticipated events may have on our reputation and the additional consequences that this may have on our business and performance. The sequence in which the factors above are presented is not indicative of their likelihood of occurrence or the potential magnitude of their consequences. Our business and financial performance could be affected by other factors identified in our past and future filings and reports, including those filed with the SEC. More detailed information about those factors is set forth in documents furnished by UBS and filings made by UBS with the SEC, including UBS’s Annual Report on Form 20-F for the year ended 31 December 2018. UBS is not under any obligation to (and expressly disclaims any obligation to) update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise.